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By Bob Duncan
Financial support to build an additional 12 new schools has been found through savings across public infrastructure schemes, according to the body set up to deliver value for public money in Scotland.
Cabinet Secretary for Infrastructure and Capital Investment Alex Neil today welcomed news that the Scottish Futures Trust (SFT) saved the Scottish public sector £131 million last year, £2 million more than the previous year.

The SFT, tasked with improving value for money from our public-sector infrastructure, today published its annual benefits statement for 2011/12.

The independently verified report illustrates that SFT has met its financial target to release savings of between £100m and £150m per annum for the third year in a row.

The trust, which was set up by the SNP government to find ways to avoid the excess profits made from Private Financing Initiative (PFI) model for public sector projects, believes its efficiency drive has cut costs on the school building budget so much that it can afford to construct another 12 schools.

According to the trust, it does this through what it calls the non-profit distributing model (NPD) – set up as a way of using private financing to fund large infrastructure projects at a lower cost than the widely discredited PFI model brought in by the last Labour Government.

An SFT report said: "Such has been the success of SFT's focus on high quality sustainable design at a competitive price that within Scotland's Schools for the Future programme, for example, enough money has been saved to build an additional 12 schools, increasing the total number from 55 to 67".

Many of the £131m savings across its activities have come from not having to use more expensive consultants.  And with more funds added to the trust's £4m operational budget, it is being given the new task of saving £500m over five years through better management of buildings and other assets owned by the government in Scotland.

SFT Chairman Sir Angus Grossart said the trust had "demonstrated significant progress in times of economic challenge".

He added: "Central to SFT's success in delivering £131m of savings and benefits has been the strong strategic alliances it has established with local authorities, health boards and other public bodies across Scotland to collaboratively deliver value-for-money on public sector construction projects."

The SFT, using calculations validated by accountancy experts at Grant Thornton and the London School of Economics, said that house-building is currently keeping 700 construction workers in jobs.  With a programme to build 1,000 homes, 600 are being built at present, on 12 sites.

Trust chief executive Barry White said: "Thanks to the collaborative working arrangements embraced by Scottish public-sector bodies, together we have secured £131 million of net benefits and savings to the taxpayer.

"These figures clearly illustrate the robust challenge and commercial expertise SFT brings to public-sector infrastructure investment across Scotland.  It is our responsibility to ensure the public pound stretches further in these challenging times.

"Nowhere is this better illustrated than through the work SFT is delivering by managing the £1.25 billion schools budget so that an extra dozen schools can be built within the existing budget."

The Scottish government said the independently-verified report illustrated that SFT had met its financial target to release savings of between £100m and £150m a year for the third year in a row.

Alex Neil said: "The Scottish Government is doing all it can to maximise investment into infrastructure projects across Scotland.

"The savings SFT achieved last year, in collaboration with a wide range of public sector bodies, allow us to deliver more – more houses and schools, more health and community projects.  Each extra £100m we invest supports 1400 jobs in the Scottish economy

"But while we are doing what we can, there is no question that swingeing cuts imposed on us by Westminster are impeding our efforts to support infrastructure investment and jobs.

"That is why the SFT’s work and the savings they are delivering across the public sector is so important.  Going forward, I know the SFT will continue to push forward with plans to develop new, alternative and innovative financing models for infrastructure across Scotland.

"This will result in a good deal for taxpayers.  And more high quality infrastructure like schools and health centres across Scotland that will benefit generations to come.''

The news contrasts with growing concern south of the border over the damage Labour-negotiated PFI contracts are doing to the English NHS.

Reports this week demonstrated the scale of difficulties facing another NHS Hospital Trust in England and the failings of PFI and the privatisation agenda south of the border.

Mid Yorkshire Hospitals Trust is losing £100,000 a day, with services set to be substantially cut as a result.  Earlier this year it was discovered that the PFI hospital in Wakefield which is part of this trust was turning away ambulances because of a lack of capacity.

The Trust has to save £24m by April 2013 but will still end the year with a £26m deficit.  The trust said it would not be in a financial position to gain foundation status, required by the government by 2014, in the "foreseeable future".

Two options are being considered for its three hospitals, Dewsbury, Pinderfields and Pontefract.  One option involves Dewsbury losing its A&E unit. Both options would see its maternity unit downgraded.

Pinderfields is a brand new flagship PFI hospital, but it has regularly turned away emergency ambulances because it is full.  The hospital was built smaller than expected in the hope that more people could be treated in the community to reduce costs – but according to the paramedics, that just isn't happening.

The hospital was built under a Private Finance Initiative (PFI) agreement, costing an estimated £330m, which Adrian O'Malley from the mid-Yorkshire Unison branch argues is leaving the trust with crippling debt.

"We wrote to MPs, various ministers both Labour and conservative and there's nobody who can say they weren't aware of this," he said, "and on the cost of the hospital, we're having to pay £40m to the PFI company putting even more pressure on patients and staff in the hospital."

Stephen Eames, the trust's interim chief executive, said: "The challenges faced by the trust have been a matter of public concern for many years."

These developments follow the recent announcement that South London Healthcare was in danger of being dissolved, despite having received £150 million in bailouts over the last three years.
Commenting, SNP MSP Sandra White who sits on the Holyrood Health and Sport Committee said:
"This latest private health crisis for the NHS in England shows just how badly PFI has damaged the health service south of the border.  Trusts are buckling under staggering levels of debts and their problems are only being exacerbated by the privatisation agenda being pursued there.
"These developments clearly show that decisions are better made for Scotland by those Scotland has full responsibility for electing instead of a Tory-led Westminster government which Scotland rejected.
"Scotland’s track record of free personal care, free prescriptions, free eye tests and record NHS dentist registrations stand in stark contrast to what is happening south of the border.  That is what the independence the NHS in Scotland already enjoys has allowed us to achieve.
"Although we are insulated from the Tories’ determination to dismantle the NHS one piece at a time, the cuts they are making are in danger of having a knock-on effect on Scotland’s budget.  Only the powers of an independent Scotland can fully guarantee the future of Scotland’s NHS."


# clootie 2012-07-12 06:25
I cannot understand how Labour managed to deflect all the bad press regarding PFI.

This concept has crippled the operational budgets of Councils and NHS and yet very little pressure has been placed on Labour to justify their short term "headline" campaign which put money into the pockets of private companies for many years to come.

How have they managed to escape being held to account - do people realise what they did?
# Mac 2012-07-12 06:32
The combination of Coalition austerity and Labour's PFI debt mountain is destroying the NHS in England. That must never happen in Scotland.
# SEUMAS31 2012-07-12 06:46
This news caused a pained look on Douglas Fraser's face, however he was cheered up again today when McMillan's lot produced more doom forecasts,as they say, put nine economists in a room and you will get ten solutions.
# scottish_skier 2012-07-12 07:06
"The only function of economic forecasting is to make astrology look respectable."

John Kenneth Galbraith
# UpSpake 2012-07-12 07:20
I've said it before and I;ll say it again. Labour's PFI was a crime against the people for their personal gain.
How many of these companies who operate this license to print money are stuffed with Labour acolytes and or relatives of Labour politicians ?. How many if these companies guaranteed by the state to reap substantial rewards from so called water tight contracts are big donators to the Labour Party ?. A source of continued income for Labour for years ahead.
The perpetrators should be jailed and the contracts cancelled or nationalised. All it takes is a good pair of sphericals from the SNP Scots government to put a stop to this rape of the people.
So why, no action on this and a great deal more ?. Incompetence or ignorance or a combination of both ?.
# Thee Forsaken One 2012-07-12 09:38
If they cancelled or nationalised the contracts it's likely the Scottish Government would be locked in court until the end of time. I'm not sure it would actually save any money in the end.

Not to mention it would set a dangerous precedent with the government choosing to overrule contact laws.
# proudscot 2012-07-12 19:50
Quoting Thee Forsaken One:
If they cancelled or nationalised the contracts it's likely the Scottish Government would be locked in court until the end of time. I'm not sure it would actually save any money in the end.

Not to mention it would set a dangerous precedent with the government choosing to overrule contact laws.

Upspake, your "solution" of the Scottish (SNP led) Government acting in such an illegal and autocratic manner, tearing up legally binding contracts and/or nationalising anything they don't wish to pay for, left as an admittedly toxic financial legacy by the previous Labour/LIbDem administration, is a gift to the anti-SNP detractors and the anti-independence unionists. Just imagine the howls of (gleefully simulated) outrage the BBC and MSM which would be levelled against "El Presidente Salmondo" and his "Nazionalists".

It would also provide Lamont with enough material for 10-page scripts to read out (badly) at FMQs from now until 2014. And if this is an example of your SDP's way of doing things in government, then thank goodness you're unlikely ever to get your hands on the levers of power in our Holyrood parliament post 2014.
# Macart 2012-07-12 07:22
Excellent news on the SFT front, still it hasn't prevented the usual suspects from throwing around, doom, gloom and discord.

Slightly O/T but NNS may want to check out this splash front page on the Express -

I get the feeling that someone is turning a screw somewhere. The past few days have seen positive results for both the Scottish Government and the YES campaign.

The SFT accounts savings
UCAS figures on Scottish Universities
Orkney Tidal turbine success
SG renewables figures on track
No campaign 'expert panel question' epic fail
Polling figures up on constitutional change
Crown Estates powers scandal
PFI Scandal
Hammond's latest Defence Cuts
Libor Scandal rocks Darling and Co
Latest Scottish NHS figures on bacterial infection, new low
etc, etc, etc

Its one after another and hey presto out of the blue comes front page, silly season shocker. The media are rallying around their beleaguered unionist chums and trying to divert attention from the utter FUBAR which is Westminster and the Bitter Together campaign. However their method leaves a lot to be desired. 'Those evil nats are doing our heroes down', booo, hisssss. The press are deliberately and systematically setting out make hate figures of Scots in general and independence voters in particular.

These boys would make Pravda proud, their manipulation of fact and fantasy is an exemplar to us all (sniff).
# J Wil 2012-07-12 07:29
The Daily Record a couple of days ago was a litany of bad news stories for the SNP.

Won't people wise up to the fact that these are all concocted and that no government could be as unrelentingly bad as this paper tries to make out?
# Macart 2012-07-12 07:51
I suspect people do know this J Wil. It's why newsprint numbers are dropping off a cliff, but having said that enough people still pick up their daily moan to make a difference in any election. Reaching them through the stone wall of 'bought and sold' media has always been the independence movements problem.

They are biased, they are corrupt and they absolutely do not care about the damage they themselves inflict on society. They have one God - SALES - and if that happens to coincide with their own political bias then all the better.

The referendum is a Godsend to these rags. They get to inflame the public, make money as a collective and unify in trashing a central political hate figure for them. The public trust and safety are collateral damage.
# cokynutjoe 2012-07-12 10:27
Tabloid headline this morning claiming that Scottish kids will not be taught about the Battle of Britain?
# Seagetagrip 2012-07-12 10:32
I tried a post on the Rangers Tax Case blog mentioning that we had similar problems with BBC and MSM in arriving at truth. That was at 08.37. My post is still waiting moderation.
Maybe someone with established cred might get in there?
# Nautilus 2012-07-12 11:26
The joke is that the various PFI companies loaded the returns over the contracts to cover the ‘risks’. Over one period, they had difficulty in raising money from the banks and the government lent it to them. You have to ask, what was in it for the decisionmakers? Where were the accountants?

First of all, where is the 'risk' if the government is the creditor? Secondly what were the mad fools thinking about when they allowed all this PFI to go ahead?

Typical Unionist Westminster: it’s only taxpayers’ dosh. It doesn’t matter how much we blow. Thank god we’ve got a thriftier lot in Holyrood.

Vote ‘YES’, or they will drag us into the mire with them.
# Mark 2012-07-12 16:35
I watched Douglas Frazer last night on the BBC 6 o'clock news.
Is it only me that thinks our TV has become more like Pravda;
on the same day that the Unionists make a fool of themselves with their
proposed question on the referendum, the BBC drags Douglas Frazer in to rubbish
the SNP government regarding the £131 million annual saving. If there
is a Gene for embarrassment then Douglas Frazer is definitely
missing it.

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